Monday, October 19, 2009

Forrester recently released an interesting report on B2B lead management. It got me thinking about how different B2B lead management is from B2C lead management and whether or not the two technologies will at some point converge.

Just so we are straight on definitions; B2B lead management automation software is a technology that helps business that market to other businesses capture, nurture and manage business leads. B2C lead management is the same thing but for companies who manage leads that represent consumers and not businesses. Given that you have two categories of technology doing almost exactly the same thing i.e. managing leads; it surprised me that the technologies are quite different in their approach.

B2C lead management is pretty focused on doing a few things very well:

1. Distributing leads quickly so that the user of the software is the first to contact the lead.

2. Managing the sales process so that the sales person is always aware of which leads they should be contacting next, enforcing continuous call backs until the lead is qualified or rejected.

3. Nurturing the lead with automated emails

4. Solid reporting so that you can compare performance of sales reps and lead sources.

It is an environment that frankly caters to a software buyer that wants a simple but effective sales process and not a great deal more.

B2B lead management isn’t focused or simple. While reading the Forrester report, the first thing that strikes you is that there are a ton of vendors all doing quite different things. Indeed Laura Ramos the report’s author refers to the offerings of these providers as a “cacophony of claims similar in name only”. The report covers 18 companies, none of whom are considered to be clear leaders in the space, although there is a slight tip of the hat to Eloqua, Marketo and Silverpop. On the B2C side, Leads360 clearly dominates a much smaller set of, largely vertically focused, lead management solutions with Leads360 being the only lead management solution that dominates multiple verticals. Similalrly the focus of B2B vendors is different to B2C platforms. It seems that the most significant foci for B2B lead management software providers are;

2. Scoring: unlike with the rapidly merging B2C scoring industry that I discussed in a previous post called Lead Scoring: What is All the Fuss About? which involves a heavy reliance on sophisticated predictive modeling; in the B2B category the emphasis is on a more rudimentary way of scoring each lead based on what marketers “think” are behavioral indicators of intent. Such signals of quality might be the value placed on downloading a whitepaper versus completing a form asking for a brochure.

3. Routing: leads are distributed to salespeople primarily based on score versus the multitude of criteria typically used by sophisticated B2C lead buyers. And whereas real-time distribution is key in B2C lead management; B2B routing lives or dies based on the quality of downstream automation into CRMs/Sales Force Automation tools. What is interesting about this is that although the dominant B2C lead management solutions do integrate with CRMs, especially the vertically focused CRMs such as agency management systems in the insurance industry, this is not as important. That is primarily because B2C lead management solutions cover the majority of sales force automation functions that a B2C sales force requires. Since the sale cycle and product/service are typically shorter and simpler respectively; a less sophisticated level of sales force automation is required which is easily handled by one total solution.

4. Lead nurturing: this component of B2B lead management systems is far more evolved than in the B2C industry. On the B2B side lead nurturing not only involves event-triggered emails as in B2C lead management but also covers complex, multi-step nurturing flows based on rules, responses, inactivity, sales events and various rounds of follow-up.

5. Reporting: while reporting is key in both B2C and B2B lead management; B2B reporting is much more focused on the marketing departments needs whereas B2C reporting is more focused on the sales management team.

And at its heart, I think that alongside the intrinsic difference in end customer sophistication, that is where B2C and B2B lead management automation solutions differ most. B2B providers attack the problem from the point of view of a marketer whereas B2C lead management providers look at the solution from the point of view of the sales manager. A B2B customer asks; How can we generate better quality leads? What can we do to align out marketing activity with sales results? How can we reduce our reliance on the sales team by increasing the automation of the nurturing process? On the other hand, the B2C lead management industry emerged with little regards for the needs of the marketing department because lead providers such as LowerMyBills, lendingtree and Quinstreet already had consistent lead quality taken care of. The questions that B2C lead management buyers were trying to answer were; if I am one of six companies receiving this lead, how can my rep be the first to contact the customer? How do I push my sales team to be more aggressive? How do I make sure that my name gets in front of the customer more than my competitors does? How can I avoid paying for leads that I don’t qualify?

The big question is whether the different needs of a marketer and a sales manager should be taken into account in one lead management system. I think that they certainly should. My biggest learning from looking at B2B lead management offerings is that there is a lot more that companies like Leads360 could be doing to appeal to the marketing departments of B2C companies. There is a whole world outside of bought Internet leads that needs addressing for B2C lead management platforms to remain relevant. B2B lead management automation systems however will struggle to more than a tiny niche play without taking on more sales management oriented functionality. What I believe will happen to the successful B2B lead management companies is that they will be gobbled up by the relatively larger sales automation companies (SFAs) so that they can offer the total solution. Will B2B lead management platforms ever enter the space of B2C lead management software? “Never say never” but given the vast difference in the needs of each market I think it’s unlikely for the foreseeable future.

4 comments:

I think you may be underestimating how swiftly the B2B marketing automation companies are trying to make the move into B2C. In the higher ed vertical, Eloqua and Aprimo have collectively signed at least three public for-profit schools in the past 12 months. We will see how successful they are in adapting their platforms to meet the needs of the B2C market.

The other big trend happening in higher ed appears to be the increasing presence of Salesforce. At least one of the public for-profits is deploying Salesforce, and a growing number of mid-sized schools have implemented the product.

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